Cinema execs blame piracy for $20 ticket prices



blog If you’ve attended an Australian cinema recently, you’ll be aware that $20 ticket prices are now a thing. If you just hit up a film every couple of weeks and avoid the cinema’s high-priced junk food aisle (your writer habitually goes to Woolworths for some snacks beforehand), then this mark may not seem like such a huge deal. But if you throw a family into the mix, a night out at the movies can now seem a little too exorbitant for many. According to several cinema executives, one of the central reasons for the ongoing price increases is Internet piracy. The Sydney Morning Herald reports (we recommend you click here for the full article):

“[Village co-executive chairman Graham Burke] said piracy was “spreading like a virus” in Australia and if left unchecked would become a serious problem for his business. “Australia is probably the worst country in the world for pirating movies,” he said, labelling it “plain and simple theft”.”

Now, to a certain extent it’s possible that Burke’s statement is accurate. Australia is one of the highest-pirating nations globally. Our love for great content, our large amounts of personal free time compared with residents of other countries and the lack of legal availability of much content locally (see the ongoing debate about watching Game of Thrones down under) have combined to ensure that Australians do pirate a lot of content, and it is indeed possible that many of us are choosing a cheap night at home watching that content rather than hitting the local cinema.

However, one can’t help but feel there is a bigger picture being lost here in the rage against Internet piracy.

First and foremost, the film industry’s own statistics show that its revenues have been stable for some time. Screen Australia has compiled a list of revenue figures over the past several years, and what they show is the industry remaining at a stable level consistently. In 2012 local box office takings were $1.13 billion, in 2011 $1.09 billion, in 2010 $1.13 billion, and in 2009 $1.09 billion. The only thing that varies is how much money each distributor is making, which probably has quite a bit to do with the quality of individual film releases.

I’m sure piracy has been increasing in that period, but there’s not much evidence that it’s had a big effect on revenues, and in fact since 2003 local box office takings revenues have increased substantially in general — in that year the industry took $866 million.

You could make the argument that piracy has stopped the cinema industry from achieving its legitimate organic level of growth. However, if you make that argument, you should also examine the revenue hit from legitimate home viewing in the form of DVD and Blu-ray releases as well as IPTV and pay television (Foxtel). Many parents don’t get to the cinema a lot because they have young families. But do they watch a heck of a lot of DVDs and Foxtel after those families have gone to sleep? Hell yes, they do.

This behaviour may remove revenues from cinemas (distributors), but it increases revenues to many of the same original content producers and hardware manufacturers which benefit from cinema ticket sales. I just personally bought a new TV sound bar for $400 — or the price of 20 cinema tickets. I can pick up virtually any movie on DVD I want for less than $30 (to own), or rent it through Quickflix for a monthly subscription fee. Am I spending less money on content consumption than someone who goes to the cinema a lot? I would say I’m probably spending more.

The truth is that overall consumption patterns among consumers have changed over the past decade as technological developments have meant that many of us can achieve cinema-like experiences at home. Piracy is a part of that overall picture, sure, but it’s not the whole picture, with most home viewing being legitimate consumption. And yet throughout all of that change, cinema revenues have remained steady in recent years and even grown on a decade-long basis.

To me what this suggests is that the problem Burke is complaining about is not a technical or legal problem which needs to be solved, but a business or commercial one. If cinemas want people to reduce the percentage of movies that they watch in their loungerooms and increase their cinema viewing time, they need to start enticing people back with incentives. Consumers need to feel they are getting a better experience at the cinema than they can get at home, or they won’t bother.

Many people feel today that the experience of paying high prices to attend a crowded cinema which only shows certain films at certain times for a certain period and packs 20 minutes of obnoxious advertisements in beforehand is something less than perfect. Ridiculous candy bar prices, poor customer service and arcane booking processes merely add insult to injury. No wonder that many of us choose to take our money elsewhere. If I am going to pay top dollar for an experience, I want to get a top dollar experience — or else I will just stay at home.

Some things I would like to see cinemas offer to entice consumers back would include membership plans (where you could attend as many films as you wanted per month for a subscription fee), cheaper, better and healthier snack bar food, streamlined booking and seat choice services that were integrated with social media so groups could more easily coordinate cinema attendance, better in-cinema seating and hot food bundling, quality on-premises childcare for parents, better customer service upon arrival, and better film quality in general. So many Hollywood blockbusters these days are just cookie cutter films not really worth paying $20 for a single viewing.

Cinemas used to be community hubs. But most of them seem to be set up these days to alienate consumers rather than enfold them in welcoming arms.

The cinema industry, like the pay TV industry and other rightsholder organisations in Australia, is turning to the legal/regulatory avenue right now in an attempt to deal with one factor which it believes is impacting its revenues. But in the meantime, it is completely ignoring other commercial factors which it could use to achieve the same outcome. The time-honoured approach of dealing with Internet piracy has been to call for Government intervention. But I doubt many in the cinema industry have actually asked customers what the industry could do to entice them out of their loungerooms more. I don’t have all those answers — but I suspect they may come as a surprise.


    • As something of a counterpoint to that we have the Sun Theatre in Yarraville which is my closest cinema.

      They are not cheap $17 for standard $20 for 3D and $10.50 Monday and Tuesday so essentially the same price as the big guys BUT what you get is far superior.

      6 Art deco cinemas each with its own style and size all cost the same price but range from leather lounges in the small one to more standard seating in the larger ones all have room for a wine chiller and wine can be purchased from the Concessions stand along with more reasonably priced drinks and popcorn Normally get 2 drinks popcorn and a choc top (Not your standard choc top either) for $17.

      Also NO ADS 1-2 previews and then the movie!

      I am very happy to pay that price at the Sun but if I had to pay that price at a standard cinema I would not bother.

      So if you are anywhere in Melbourne head over to Yarraville have dinner at one of the many great Restaurants (Make sure to Book) you will not regret it!

    • bwahahahaha – maybe they should increase the ticket price to $50 then!

      They have buckleys of me ever attending a movie theatre at $20 a pop, or anything like it, when you can see the same movie in the USA for $5, it just goes to show how much corporations in Australia love to gouge us.

      Sorry Graham Burke, you are the problem, not the solution!

  1. I work summer seasons for a mobile cinema mob here in Western Australia, and i can safely say that some of our biggest events see us putting a movie on for well over 1000 people.

    We charge the organisers a nominal fee for our service + whatever the distribution company (or studio if we are doing a still at cinemas release) and then they charge (or don’t charge in the case of a free event) what they feel will recoup their costs, being outdoors we end up seeing a surprisingly large number of people attending.

    If anything, Drive-In cinemas had it the best compared to their indoor counterparts.

    Cost of projection equipment doesn’t help either, 4K projectors aren’t cheap, we have a 2K and that cost at least $20,000 just on its own.

    What i do like is how my local cinema does it though, Grand Cinemas here in Bunbury (really, Grand Cinemas anywhere in Western Australia), i renewed my Grand Card the other day, cost me $30.00 to do it. I can buy tickets at $12 each for me and 3 friends any day of the year except Tuesdays which is cheap ticket day.

    As a family we did work it out that without that grand card, to take 4 adults (my mother, myself and my 2 teenage sisters) to go see a movie, it would be about $20.00 per ticket (last years prices) without even going near the food bar, so that’s $80.00 right there, then if you include the cost of food ($15.00 for popcorn, a chocbag and a medium drink) that comes to $60.00.

    Total night out at the movies: $140.00.

    Cost of waiting for the movie to come out on DVD/Blu-Ray and then buying a bottle of cooldrink+a box of popcorn+a bag of maltesers per person: $30.00 for the movie on BD, $4.00 for a 2L cooldrink, $4.00 for a box of 5 popcorn bags, bag of maltesers per person (about $3.00?)…

    Total Price: $50.00.

    Total Saving over going to the movies: $90.00

    With that saving, i could buy a second movie on BD and still save money.

    The cinema scene really needs to lift their game if they want to compete in the modern market.

    • I was going to write a nice long post, but you basically said everything I wanted to say except this:

      Instead of them blaming piracy for raising the prices, I hazard a guess that piracy goes up in reaction to their price rises.

      Not everyone is going to pirate a movie, but if the choice for some is “Watch it now for free on their 50″ plasma/home cinema” or go somewhere to “pay $100 for their family to see the same thing”? Some will take the free option….

  2. We went and watched The Other Woman last night. I’m 4 hrs North of Brisbane on the Fraser Coast. We don’t have anywhere near the population of Brisbane but we were able to purchase the tickets for $9 each. Only available through cheap Tuesdays though otherwise I think it would have been around $15 a ticket.

    I really like the idea of Cineplex and their pricing model. I’m guessing they would do ok as far as customer numbers are concerned.

    Then on the other scale we had friends visit a cinema (I think around Brisbane) which wasn’t Cineplex (obviosuly) but for one adult and two children it cost them $70 to watch Winter Soldier. That’s just a rip off!

    • I live in Brisbane and can confirm Cineplex are ALWAYS busy.

      The candy bar is cheap as chips as well – like $7 for a large drink and a large popcorn cheap

  3. I don’t see how piracy can really have much affect. When a movie is released, the only way to get a pirated copy is through cam recordings, or sometimes leaked screenings. The cam videos are notoriously bad quality (coughing and laughing people etc) and leaked screenings are generally rare. By the time the movie comes to DVD/Blu-ray, it is no longer shown in the cinemas. If people are willing to put up with the quality, then they probably wouldn’t have gone to the cinema anyway.

    As for myself, i rarely go to cinemas anymore (the hobbit movies are the only ones i have seen in the last few years), i just wait for it to come on blu-ray and buy it. It’s only a little more expensive, but i get to keep and watch it as many times as i like. If the movie tickets were about half the price, i would probably go more.

    • Same here. I might see 5 or 6 movies a year, generally from around this point on. If I miss it, then downloading it isnt an option because the quality of a cam is so bad its not entertaining, so its a case of waiting for the blu ray release.

      I’m reluctant to sit in a cinema for 2 to 3 hours for health reasons, and very rarely travel just to see a movie, so my options are limited. A fact I live with.

      If I see a movie, its still a case of waiting for the blu ray release to get it for my collection to see it again, and even then I might wait for the sales to drop the price. Depends on the movie. Again, piracy isnt an issue, and either way it isnt a lost sale.

      Laying the blame on piracy ignores the CAM level quality of most cinema period downloads, and as normal refuses to accept that the industry is part of the problem. CAM’s dont create the problem, prices and lack of access do. CAM’s and torrents are the symptoms, not the source.

  4. If piracy is such an influence on increasing ticket prices, why in Thailand you can see the latest movies in a legitimate cinema for less than AU $5? (and just outside you can be offered a bootleg Bluray or DVD of the movie currently showing for $5).

    Seems like piracy in Thailand has actually lowered cinema ticket prices.

  5. This is what they’ve been programmed to say, through the same information channels they receive their film allotments from.

    The real problem? You have to dig a little deeper.
    First up, you have to admit that the big media figures are correct, but only insofar as they go.
    They never advertise the sledging that the theatre segment has taken from the VCR and now DVD outlet aspect, which big media also own a substantial slice in. Those figures are never factored in and presented accurately.

    Why should somebody go to a theatre and pay $20 to see a movie when they can go to J&B Hi-Fi and own it for the same price, then watch it as often as they like, whenever they like, down through the years?

    The peurile pointing_of_the_finger tactic works for them with ‘look, over there, no, not here, there’, but just a bit of thought lends the lie to the message.

    You will always get a thief element in any social demographic, but you will never get a social demographic entirely made up of thieves. I do a lot of downloading, but if I see something I like, it’s human nature to want to possess it. There’s only two ways you can do that: you can make it yourself or, if you are not capable of reproducing the same quality, you go out and buy it, and that’s what the vast majority do. It is through this aspect that downloading, or ‘pirating’ as the greed segment prefer to slander the ‘try-before-you-buy’ market segment with, enhances sales, and there are any number of studies that have endorsed this viewpoint.

  6. My father & i, & more recently my wife & i used to go every Tuesday for a cheap movie. For exactly the reasons that Renai has outlined above, we no longer go. I’ve now purchased a 64″ plasma with a 9.1 surround sound system & i’d rather stay at home & watch a Blu-Ray as the picture & sound quality are far superior, foods better & seats are comfier.

  7. Cinema execs blame piracy for $20 ticket prices.

    Pirates blame cinema execs for having to wait X amount of time before they are ‘allowed’ to watch the latest movie that was released to the rest of the world -X ago.

    It’s their own fault.

    • Not quite true.

      The cinema industry doesn’t get to choose when the movie gets released in Australia.

      The stupid movie industry continues to base cinema releases on holiday times for a country depending on the movie.

      You have 3 types of cinemas, the Day release cinema (Class A), the second release cinema (Class B) and the non-theatrical cinemas (Class C).

      When the studio says ‘we are now releasing this movie to you’ the Class A cinemas don’t really have much of a choice but to say ‘ok’, if they choose not to show it they risk losing their ‘day release’ classification.

      Part of the ticket price is made up of money going to the studio, Disney for instance might say to the cinema ‘For X movie, you will give us 30% of the door takings or $300 whichever is the greater’.

      What the cinemas (or at least some) have basically done is said ‘ok, we’ll just up our prices to cover all the studios’.

      I’m not agreeing with what they have done, $20.00 is outrageous, but to blame it on piracy is poor form.

  8. There is a cinema near me that still charges $6 a ticket and on Tuesday lunchtimes provide free sandwiches to seniors.
    The founder (who died a couple of years ago) got it as a bit a folly to show movies that he personally liked and was prepared for it to lose money, but to his delight it actually made a profit.

    It’s packed during school holidays.

  9. Pff….I went to see Captain America the other day in Gold Class. $60 for the tickets. Whatever, it’s Gold Class. The seats were sub-optimal, but, oh well. Then two basic glasses of sparkling wine, two glasses of basic red wine and a bowl of wedges. $90. WHAT?

    All up, nearly $150 when I could do the same at home for a pittance, if I waited for blu-ray.

    THAT is why I don’t go to the cinema. $150 for two hours entertainment. I can a lot of other things for that much money that last longer than 2 hours.

    • Heh…. I hope you got the chairs you asked for. We tried to get middle seats a few weeks back and was told “oh you can’t the cinemas full” Which is fair enough since gold class cinemas are usually pretty small…

      We get in.. we sit through previews… movie starts. And lo and behold only about 2-3 other people in there. Yeah definitely “full” =/

    • With all respect, you went to Gold Class. There is no connection between Gold Class and value for money, you go there simply to say you saw it Gold Class, and to pretend that the seats were more comfortable than they actually are…

      Watch it in a standard cinema, and your cost is about $40, which is still expensive.

      And at the end of the day, thats what puts a lot of people off – the overall cost at any level. Its not just the $20 per ticket, but the additional travel costs, and snack costs. Go watch a movie any time in the afternoon, and short of the weekend the cinema is empty.

      What pleases me are the cinemas that dont go over the top with prices. Here in Wollongong, the university offers cheap movies every week, and there is another independent cinema about 5 kms away that does similar. And both of them generally have the full house sign out.

  10. I rarely go to the movies these days, I just cant be bothered putting up with poorly focused projectors, rowdy kids and non-optimal seating positions (not to mention adding in baby sitting costs to an already expensive night out) …. as a result I watch most movies at home on Blu-ray or via Netflix (720p).

    I have over 320 movies combined on DVD, HD-DVD & Blu-ray and used to DL the odd movie or two if I wasnt sure I wanted to buy it or not – now-a-days I never DL movies as I get to see most of the ones I want to watch via NetFlix or iTunes and then buy them if I really like them.

  11. The last movie I saw at the cinema was Avatar, when it was a new release.

    Since then, the small children thing has happened, and, really, $30 for a blu-ray 3 months later that you can watch again & again, with special features, or $40 + food + parking + effing annoying & patronising ads + irritating crowds…

  12. this argument is the same with toll roads,

    the price is going up because there are less consumers than expected… thus forcing more people to find an alternative

    the size of the road/cinema is the same, just fill it up and get people in the habit

    (actually now im talking about filling it up, ive skipped going to the movies a few times because i look up the screening, and all the good seats are taken, I’m not paying $20 to sit in the front row)

  13. I can safely say that when i go to my local cinema, i go when the movie is coming to an end, i hate going to watch a movie in a screening room when there are a lot of people there, i don’t mind if there are a handful (say 20 or so), but if it even looks to be close to a full house, nope.

    I also like not having to be forced into a specific seat, or have to buy a ticket for a specific seat, i like getting there, grabbing a ticket, and then choosing the moment i look at what seats are available.

    But then, for a regional cinema that’s not really a problem unlike the big city ones :)

  14. I haven’t visited a cinema in decades because of the adverts.

    I’m not so worried by the price, but I absolutely, definitely won’t watch adverts.

    My choice.

  15. Whole lot of zombie businesses around, electronics stores, news agencies, football, auto’s and cinemas. All of these old traditional businesses have no future. I’m astounded cinemas are still in business.

  16. Telstra customers can get 12 ish dollar tickets to almost any village cinemas screening except for like.. Friday and Saturday nights or something?

    They can buy Upto 10 tickets at a time. It is the standard village website, but you have to go in vita the Telstra website.

    It is about the only customer loyalty program I have ever thought was worth using more than once.

  17. I am sure all these people go and consult AFACT before releasing these ridiculous statements because the wording is almost always identical.

  18. Used to love going to the movies but the prices just got out of control, first I stopped buying a drink, then stopped buying popcorn, then noticed I was getting little or no change back after buying a ticket…

  19. Looking at those revenue stats, assuming they’re not adjusted for inflation then the cinemas are facing a slow decline in real terms (because revenue has remained stable but inflation is 3+ percent annually).

    I think piracy is likely to be a very small contributor to this, though… I agree with the analysis that says cinemas just aren’t offering a good value proposition to consumers anymore.

    Consider that 10 years ago, watching a movie at home meant a 60cm low-definition TV, probably with poor sound. Nowadays anyone with a full time job can afford a 120cm+ LCD or plasma high-definition TV and accompanying sound gear is widely and cheaply available.

    What’s changed for cinema during that time?
    Bigger screens? I guess you can go to IMAX, but that’s only attractive for certain movies.
    Better sound? Maybe marginally, but nowhere near the improvement that’s occurred in home audio.
    Higher definition? Again, the improvement in the home cinema experience dramatically outstrips cinema improvement.

    Add to that rising ticket and junk food prices and it’s easy to see why more people are choosing to enjoy (primarily legally) blockbuster movies in their own home. For my part, I will only see a movie at the cinema if (a) it’s worthy of a giant screen (i.e. not a character drama or comedy) and (b) I can get discounted tickets (which I usually can through Telstra/Optus member deals or Entertainment Book vouchers.

    • My entertainment setup at home is a 50″ 3D plasma, with 7.2 surround sound. Tele cost me ~$1700 when it was new (Samsung thingy, bought about 3 or 4 years ago) and the surround sound was around $1000 (Sony Mu.Te.Ki, solid mid range system).

      For that sort of price range, it gives a very good experience, and when you watch lots of entertainment its easy to get used to. Thats not a big price range, and the quality is enough to make me not want to travel to see movies.

      And thats where most people are at. Their home setups are that good these days that they start competing with the cinemas as a practical option. You arent fighting with VHS over a 3.1 stereo on a 54 cm TV, you’re working with something much much better.

      Thats a significant part of why numbers drop, as it means people have their own libraries, and start getting invested in entertainment in other ways. Its not a hassle to have a DVD or blu ray library, so the full day out with the family is a treat, not a regular option.

      Numbers are down, profits are down. Simple economics. Prices go up to compensate, and they look for the easy option to blame. All thats happened is that society has changed again. In the 50’s, the TV changed our habits, and in the 00’s and 10’s 1080p and the internet is doing much the same thing.

      The industry adapted to the TV, it’ll adapt to this.

  20. Charge people more for an already over-priced experience. Awesome. That will work well.

    In a world of on-demand media, inexpensive sound systems and large screen displays, the pull of the cinema is all but gone.

    There are gimmicks such as high-resolution, 3D and so forth. But most people have worked out that that doesn’t really justify the (often already significantly hiked) prices.

    Lets be honest; they are charging more because they are dying. People, like the technology used, have moved on.

  21. I went to the movies yesterday, Grand Cinemas in WA.
    I had adult membership, kids card had expired, so I renewed it.

    Along with me were my five year old daughter and nephew.
    Two ice teas, a small frozen raspberry and three popcorns, plus tickets was about $70 for a 1 hour 37 min movie. (The candy bar is an absolute ripoff).

    A day pass for same numbers at Adventure World, $130.

    Burning calories at Adventure World instead of gaining them at the movies probably a wiser choice.

    I must say though, there is something nice about the big silver screen, it is better than 55″ at home. Though at home I don’t have to put up with bogans ;)

  22. I saw a movie almost a year ago, mainly because it was something I wanted to watch, but haven’t been back since partly due to cost and also due to being nothing that has taken my fancy. A lot of the movies I’ve seen at the movies are usually ‘kids’ movies, mainly as I find them a lot more fun, probably next time I’ll go back to the movies is when How to train your Dragon 2 comes out.

    My pet hate with the candy bar is the popcorn which usually isn’t hot anymore and just comes out of a plastic bag (seen this happening at Northlands), so isn’t as nice as it used to be (aka paying a premium price for a sub-standard product). My usual thing like others is to go to woolies to get chocolates, chips, etc before going to get the tickets.

    Last thing, piracy is theft? If it actually stole the original, then I’d agree, but pretty sure the original still exists.

  23. Funny… I misread the article title as “Cinema Execs blame 20 ticket prices for piracy” and I thought “Wow! About time they realised that!”

  24. One day, Renai, when you’re in the US for whatever reason, visit an AMC theatre.

    It puts most local theatres to shame.

    I pretty much see movies when I’m overseas and it costs less than $10, or wait for home-release now – I have some slight hearing problems, and often have to flick back a few times to hear the dialogue in some scenes properly. I can’t do that in a theatre, and if its packed then I’m going to miss even more over everyone tittering.

    I’d make an exception for the Astor theatre, but I live too far away from it to be bothered.

  25. People pirate films that are at the cinema? Seems a waste really. A cam job can’t compete with the cinema experience.

    Also, I’d think the main issue would be that cinema is competing with DVDs, TV, Pay TV, the Internet, video games, etc. If there were no easy access to films (and it my case, all legal access), then I’m sure I’d go to the cinema more. But because it’s much more convenient to watch films when they are released on home media, I’m not very inclined to see films at the cinema. Nothing to do with privacy, not a huge amount to do with price, but nearly everything to do with convenience and choice.

  26. So if a movie is RS like most are can I demand my money back. After all it’s clearly faulty or I would have enjoyed it.
    Yeah! As if they would operate like the real world. Just another parasite whinging.

    I like on demand with itunes and Fetch TV etc. No movie is worth $20 or even $10.

  27. I was about to start this by saying “I don’t pirate”, but that isn’t strictly the case. The only pirate movie I have in my fairly large collection is Siam Sunset and the only reason for that is the only place I could find that had it on DVD was an Amazon store that wouldn’t ship to Australia as it was in a different region (awesome, great Australian movie you can’t buy in Australia…). Apart from that however all of my movies are bought.

    As a family of four going to the cinema is a special treat, maybe once a year. Apart from that we take the kids to JB Hifi to check out their specials when they’re on and let them pick up a couple from there. Good case in point picked up 9 movies for $54. Myself and the wife like our movies but as has been said, when you’re paying $40 just to watch the show in a crowded theatre, where is the incentive? There have been many many movies I’d love to go watch but with work, family etc all viaing for my time, I don’t go.

    I don’t pirate (apart from Siam Sunset which if I found I’d buy anyway) so as far as I’m concerned the studio execs aren’t doing themselves any favours by not having the content in an easily accessible format. Those 9 movies we got from JBs for the kids, asking price on iTunes was between $20-30 per movie in standard definition. The DVDs are standard definition as well so I’m not missing out on anything apart from throwing money away. If I want a digital copy, I’ve got software on my computer that will rip it and stream to my Apple TV or upload to my iPad for holidays.

    If content was cheaper and more readily available in various forms then we’d spend more money on movies than we already do. My ideal would be the ability to buy a physical copy that’s bundled with a digital copy (playable in your digital library of choice, iTunes, Google, Amazon whatever) at or around the time it was released on the screen for a reasonable price ($15-29?).

  28. I pay $5.50 at both my local cinemas. Cineplex and Events chain. Would never pay $20. Nup. No way. I love South East Queensland.

  29. I just wait till the movies hit Bigpond Movies now days (it doesn’t really take that long). It costs me $6 and I save hundreds and hundreds of dollars a year…

    While it no doubt has some effect, piracy seems to be more a convenient excuse to gouge folks, the cost of the whole “movie experience” is what is driving folks away.

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